Legal Expense Insurance

Let us help you get Legal Expense Insurance

Hiring a lawyer can burn a hole in your pocket. Did you know that an experienced lawyer charges an hourly rate above $400? A legal retainer can lead to a $10,000+ charge.

If your business is involved in a lawsuit, legal expenses can quickly creep up, putting you at risk of losing your entire business.

The lawyer is giving legal advice..

What is Legal Expense Insurance?

Just as the name implies, legal expense insurance is a unique type of policy that protects you in case of an unexpected legal situation.

The policy will cover your legal costs and provide you with access to an experienced lawyer to assist your situation.

Navigating the Canadian legal system is costly and complex. Beyond the typical skillset of a business owner. Many business owners try to walk from legal disputes, choosing to ignore them hoping that they go away. Unfortunately, that’s not the case. A legal dispute can drain your company of all its resources.

Legal expense insurance provides you justice when you need it!

Attorney talking on mobile device and playing with Justice scale

What type of legal expenses are covered?

A legal dispute can lead to many expenses beyond just that of a lawyer charging you an hourly rate.

The following type of expenses are typically covered:

  • Lawyers’ fees (includes the hourly fees charged by lawyers and any of their other disbursements like printing)
  • Expert witness fees (your case may require to engage an expert witness to provide their expertise)
  • Report fees
  • Court fees
  • Other legal disbursement

Do I always have access to a lawyer?

Did you know that many legal disputes can be prevented when legal advice is provided at the early stages of the situation? Many business owners wait too long or take the wrong steps when a dispute occurs, leading to a bigger problem.

The other benefits of a legal expense insurance policy is that it provides you with unlimited access to legal advice consultations, in case you have any questions for a lawyer. These consultations are included, even if the specific issue is general and may not be a legal event covered by your policy.

What type of legal situations are covered by a legal expense policy?

Legal expense insurance covers a wide range of legal situations. The following list are some of the most common ones small to medium sized business face:

  • Contract disputes: There is a breach of contract with a client or a supplier. This could either be due to the failure to perform under the contract or failure to pay an amount owed.
  • Employment disputes: An employee or a former employee sues you for wrongful termination.
  • Tax investigations: The CRA decides to audit your business and institutes fines and penalties. You want to hire a lawyer to appeal the decision.
  • Personal injury: An employee of yours is injured at a client’s site due to a client’s negligence.
  • Property protection: A third-party trespasses on your property and vandalizes your property. You want to pursue them for damages.
  • Landlord-tenant disputes: Your lawyer tries to evict you because they claim that you breached your lease agreement.
  • Statutory license protection: Your business faced a suspension of a business license.
  • Criminal prosecution: You require defense due to criminal proceedings under the Criminal Code, Occupational Health & Safety Act, or Workplace Hazardous Materials Information Services Act.
  • Highway Traffic Act infractions: Your commercial vehicle gets impounded because of the actions of one of your employees.

Who should obtain legal expense insurance?

Legal expense insurance should be obtained by all small to medium sized businesses that have employees and deal with many customers and suppliers. Many policies are designed for companies with revenue less than $10 million.

The cost of the premiums is a fairly small expense in the grand schemes of things. The added protection will provide the business owner with peace of mind and allow them to focus on growing their business without the fear of a legal dispute draining their resources.

How much does a legal expense insurance policy cost?

The premiums vary based on the company’s gross revenues over the last 12 months, and forecasted gross revenues for the current year. The larger the company, the greater the premiums.

Other factors include whether the business has previously been in legal disputes or proceedings in the last 5 years. If that is the case, you can expect your premiums to increase.
A lot of legal expense policies will contain limitations and exclusions. Your insurance broker can walk you through your options so that you can make an informed decision.

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Legal Expense Insurance FAQ

Coverage exclusions vary from policy to policy. A few common exclusions include:

  • Contract disputes below $5,000 (this is to prevent you from legally pursuing every customer that does not pay you).
  • Employment claims made during the first 90 days of the policy’s effective date.

No, the insurer will assign a lawyer to your file. The insurance company will review the specifics of your situation and appoint a lawyer with the adequate skills and experience that fits your case.


You have to trust that the insurer is on your side! They want a speedy resolution as much as you!

No, you will not be covered for a legal event that started before the coverage start date. You may also not be covered for contracts that started prior to the coverage date.

No, criminal charges are covered only to the extent that they were caused by the policyholder carrying out their employment duties and were not deliberately committed.

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